Irvine Firms Awaiting Office Parks Decision
A year’s heated debate over an issue that has divided the county’s biggest developers and could influence the shape of Irvine’s emerging downtown is expected to culminate tonight when the Irvine City Council decides whether to allow companies to develop office parks on land designated for their own corporate use.
The council’s vote will determine whether the new owners of Fluor Corp.’s corporate headquarters site can go ahead with the first phase of plans to develop 5.2 million square feet of restaurants, hotels and office buildings on 122 acres of open, grassy acreage abutting the San Diego Freeway.
The council’s decision will have an immediate impact on the fortunes of the Fluor Corp. If the council does not provide a zoning allowance for the mixed-use project, the buyers of the Fluor property, Trammell Crow & Winthrop Financial Associates, have said that they will withhold $35 million of the purchase price they agreed to when the transaction was completed last July.
Also eagerly awaiting the council’s action is the Parker Hannifin Co., which recently submitted a request to the city to develop a vacant, 15-acre site on Von Karman Avenue that until last September was occupied by the company’s Parker Bertea Aerospace Group. Parker Hannifin, in joint venture with Birtcher Development Co., hopes to build two or three high-rises and perhaps a hotel on the old Bertea site, according to a Parker Hannifin official.
Kelly Green, project manager for Parker Hannifin, added that over the long term, the company also plans to have the rest of its Orange County operations join the Parker Bertea Aerospace Group at a manufacturing site it recently purchased from the Irvine Co. in the new Spectrum industrial complex in East Irvine. When that happens, he said, Parker Hannifin would also want to develop office buildings on a 42-acre site it owns on Jamboree Boulevard in Irvine.
Tonight, Green said, the fate of Parker Hannifin’s development will be decided, at least for the immediate future.
At issue is whether the City Council will vote to amend a 1982 zoning ordinance that set the stage for more intense office development on 2,500 acres near John Wayne Airport that previously was planned mostly for manufacturing plants.
Ordinance Set Limit
The ordinance set a 15-million-square-foot limit on additional office construction, of which 4.7 million square feet were reserved for existing corporate landowners.
Last spring, the city and some of its most substantial corporate citizens, including Fluor and Parker Hannifin, came to loggerheads when the city insisted that the ordinance authorized the companies to use their development allotment only for corporate offices, while the holders of the allotments argued that they could build anything they wanted.
Besides Fluor and Parker Hannifin, six other firms have corporate-development authorizations that potentially could be used to build speculative office buildings, according to Larry Hogle, the city’s director of community development. While only Fluor and Parker Hannifin have imminent development plans, Hogle said American Hospital Supply wants to preserve a right to build up to 1.6 million square feet of commercial buildings in the future.
The surfacing of corporate development plans last spring aroused complaints from the Irvine Co. and Koll Co., both of which have office, hotel and restaurant complexes that would be in direct competition with the proposed Fluor complex.
Traffic and Fairness
Objections have centered on the issues of potential traffic burdens on the city’s surface streets and freeways and the fairness of “changing the rules of the game” to benefit a few corporations.
Smith Tool Co., which like Fluor has seen its business shrink with the nationwide slump in oil-related services, would also like to develop its landholdings for added income. But Jim Follingstad, Smith Tool’s real estate consultant, said that in 1982, the company declined to apply for building credits because it understood the credits would have to be used to build offices for its own employees. If the company had acquired the credits, Follingstad said, its property today would be 50% more valuable.
Buffeted by the storm of controversy, the City Council last March directed its staff to try to work out a compromise with the corporate dissidents. Months of meetings were held under the sponsorship of the Industrial League of Orange County to try to thrash out differences.
In the end, Todd Nicholson, president of the Industrial League, said six of the 10 corporate participants in the discussions, including the Irvine Co., agreed to support a compromise proposal forwarded by the city Planning Commission. Koll and Smith Tool remain in opposition.
Amendment Approved
In December the Planning Commission, dismissing its own staff’s reservations, voted 3 to 1 to approve a proposed zoning-ordinance amendment that would enable corporations to convert their corporate development allocations to other uses, such as speculative office buildings.
Proponents of the amendment say it would not worsen the city’s No. 1 planning problem--traffic congestion.
William Lane Jr., a partner in charge of the Dallas-based Trammell Crow’s Orange County division, said the amendment would permit only 1.5 million square feet of additional office buildings to be constructed on the Fluor property--a far cry from the 5.2 million square feet of additional construction that Trammell Crow is proposing. Additional development, he said, will depend largely on whether the city agrees to lift its ceiling on office construction throughout the Irvine Business Center.
The Industrial League, meanwhile, has launched its own study of ways in which the city might improve its traffic-circulation system to pave the way for additional office development.
Irvine Mayor David Baker said Monday that although he will listen to arguments on both sides tonight, he tends to favor the proposed amendment. He said he believes that the amendment “has the potential for being a realistic solution.” He said that although he has concerns about the extent of development being proposed for the Fluor property, he believes that the City Council will retain control over the plans through its regular review process.
Baker said that tonight, the council faces a “tough, bite-the-bullet political decision.” He added: “Regardless of what we decide, I don’t think we will make everyone happy.”
